M&S gets back its sparkle

STORES group Marks & Spencer provided overwhelming evidence of its recovery, unveiling the best Christmas sales in years and a strong increase in takings over the entire autumn period.

Clothing sales were 10.9% ahead for the seven weeks to 12 January, meeting even the most optimistic City expectations. Sales of homewares were also strong, up 10.2% over the period, providing an increase in takings for general merchandise of 10.8%. Even excluding the impact of new space, sales grew by 10.4%.

Sales were also strong in the 15 weeks to 12 January, the first sustained solid growth for three years. Clothing sales were 8% up and home goods takings increased by almost 10%. Underlying group sales were 7% ahead, far outstripping City forecasts.

Chairman Luc Vandevelde said: 'In a buoyant clothing market, we are pleased to see our customers responding to the better appeal, quality and availability of our clothing as well as the store environment.'

He warned, however, that the current rate of growth is unlikely to be sustained. 'We do not assume a continuation of the recent market conditions for general merchandise,' he said.

Core food sales were up 5.4% over Christmas and the group said it had significantly increased market share in that sector. Group like-for-like takings were 8.3% ahead over the festive season and M&S said that 25% less stock than last year was put into the post-Christmas sales.

The recovery in the core clothing business was attributed to the popularity of the group's new Perfect range, which specialises in classic women's clothing, and the George Davies-designed per una range. This represented 15% of the revenues from women's clothing in the 90 stores where it appeared.

Last autumn, M&S produced sales figures that suggested it was beginning to turn the corner after years of disappointment. But a year ago, the group reported a 2.3% fall in like-forlike Christmas sales and a drop of 5% in third-quarter takings. Clothing and footwear sales sank by almost 10% in that period and talk of recovery seemed far-fetched.

Today, the group also said it would unveil details next week of its plan to return £2bn to shareholders in March.